92-53RESOLUTION NO.
NOTE RESOLUTION
$450,000
PUBLIC PROJECT PROMISSORY NON-RECOURSE
NOTE, SERIES 1993
(CITY OF OTSEGO, LEASE PURCHASE PROJECT)
ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF OTSEGO
INITIALLY ADOPTED: December 14, 1992
AMENDED AND RESTATED: January 28, 1993
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TABLE OF CONTENTS
Page
ARTICLE ONE - DEFINITIONS, EXHIBITS, LEGAL AUTHORIZATION
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AND FINDINGS . . . . . . . . . . . . . . . .
. 1
1-1.
Definitions . . . . . . . . . . . . . . . . ..
. 1
1-2.
Exhibits . . . . . . . . . . . . . . . . . . . .
. 5
1-3.
Legal Authorization . . . . . . . . . . . . . .
. 5
1-4.
Findings . . . . . . . . . . . . . . . . . . . .
. 5
ARTICLE TWO - NOTE. . . . . . .
8
2-1.
Authorized Amount and Form of Note . . . . . .
. 8
2-2.
Initial Issue . . . . . . . . . . . . . . .18
2-3
Execution . . . . . . . . . . . . . . . . . .
. 18
2-4.
Delivery of Initial Issue . . . . . . . . ..
. 19
2-5.
Mutilated, Lost or Destroyed Note . . . . . . .
. 19
2-6.
Ownership of Note . . . . . . . . . . . . . . .
. 20
2-7.
Registration, Transfer and Exchange of Note . .
. 20
2-8.
Interest Rights Preserved; Dating of
Registered Note . . . . . . . . . . . . .
. 21
2-9.
Other Revenue Obligations . . . . . . . . . . .
. 21
ARTICLE THREE - REDEMPTION BEFORE MATURITY . . . . . . .
. . 22
3-1.
Redemption . . . . . . . . . . . . . . . ..
. 22
3-2.
Notice of Redemption . . . . . . . . . . . . .
. . 22
3-3.
Cancellation . . . . . . . . . . . . . . . . .
. . 23
ARTICLE FOUR - GENERAL COVENANTS . . . . . . . . . .
. . 24
4-1.
Payment of Principal and Interest . . .
. . 24
4-2.
Performance of and Authority for Covenants . .
. . 24
4-3.
Title and Instruments of Further Assurance . .
. . 24
4-4.
Taxes, Assessments and Charges . . . . . . . .
. . 25
4-5.
Maintenance and Repair . . . . . . . . . . . .
. . 25
4-6.
Recording and Filing . . . . . . . . . . . .
. . 25
4-7.
Books and Records• . . .
25
4-8.
Intentionally Omitted . . . . . .
26
4-9.
Nature of Security . . . . . . . . . . . . . .
. . 26
4-10.
Disposition of Pledged Funds . . . . . . . . .
. . 26
4-11.
Enforcement of Covenants . . . . . . . . . . .
. . 27
4-12.
Covenant to Lease, Sell and Operate . . . . .
. . 29
4-13.
Acceleration . .29
4-14.
Tax Exempt Status of Note
29
4-15.
Conditions to Authority Action. . . . . . . .
. . 29
4-16.
Mortgage . . . . . . . . . . . . . . . . . . .
. . 30
ARTICLE FIVE
- FUNDS AND ACCOUNTS . . . . . . . . . . .
. . 31
5-1.
Deposit of Note Proceeds . . . . . . . . . . ..
. 31
5-2.
Intentionally Omitted . . . . . . . . . . . .
. . 31
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5-3.
Intentionally Omitted . . . . . . . . . . . . .
. 31
5-4.
Intentionally Omitted . . . . . . . . . . . . .
. 31
5-5.
Intentionally Omitted . . . . . . . . . . . . .
. 31
5-6.
Note Fund . . . . . . . . . . . . . . . . . . .
. 31
5-7.
Intentionally Omitted . . . . . . . . . . . . .
. 32
5-8.
Intentionally Omitted. . . . . . . . . . . .
. 32
5-9.
Deposit of Funds with Paying Agent . . . . . . .
. 32
5-10.
Application of Moneys . . . . . . . . . . . . .
. 32
ARTICLE SIX - POSSESSION, USE AND RELEASE OF PROPERTY . . .
. 34
6-1.
Possession and Use.
34
6-2.
Easement for Access or Utility Service
34
6-3.
Release of Encumbered Equipment . . . . . . .
. . 34
6-4.
Release of Unimproved Land . . . . . . . . . .
. . 34
ARTICLE SEVEN - INVESTMENTS . . . . . . . . . . . . . . .
. . 36
7-1.
Investments by AUTHORITY . . . . . . . . . . .
.. 36
7-2.
Return on Investments . . . . . . . . . . . .
. . 36
ARTICLE EIGHT
- DISCHARGE OF OBLIGATIONS TO NOTEHOLDER .
. . 37
8-1.
Conditions of Discharge . . . . . . . . . . .
. . 37
8-2.
Payment of Note . . . . . . . . . . . . . . .
. . 37
ARTICLE NINE - SUPPLEMENTAL AND AMENDATORY RESOLUTIONS . . . 38
9-1. Supplemental and Amendatory Resolutions
Not Requiring Consent of Noteholder . . . . . . . 38
9-2. Supplemental and Amendatory Resolutions
Requiring Consent of Noteholder . . . . . . . . . 38
ARTICLE TEN - AMENDMENT TO LEASE . . . . . . . . . . . . . . 40
10-1. Amendments Without Noteholder Consent . . . . . . 40
10-2. Amendments Requiring Noteholder Consent . . . . . 40
ARTICLE ELEVEN - MISCELLANEOUS . . . . . . . . . . .
. . . . 41
11-1.
Consent of Noteholder . . . . . . . . . .
. .. . 41
11-2.
Severability . .
. . . 41
11-3.
Authentication of Transcript
. . . 42
11-4.
Limitation of Liability . . . . . . .
. .. . 42
11-5.
Registration of Note Resolution . . . . .
. . . . 42
11-6.
Approval of Lessee . . . . . . . . . . .
. . . . 42
11-7.
Authorization to Execute Lease
and Incidental Documents . . . . . . . .
. . . . 42
SIGNATURES
. . . . . . . . . . . . . . . . . . . . .
. . . . 43
EXHIBITS
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NOTE RESOLUTION
WHEREAS, on December 14, 1992, the Economic Development
Authority of the City of Otsego (the "Authority") adopted
Resolution No. 92-52 (the "Prior Resolution") providing for the
issuance of a $450,000 Public Project Revenue Bond, Series 1993
(City of Otsego, Lease Purchase Project) (the "Bond"); and
WHEREAS, in order to successfully sell the Bond, it is
necessary that the Bond be issued in the form of a promissory
note secured by a mortgage (the "Mortgage").
NOW, THEREFORE, BE IT RESOLVED by the Economic Development
Authority of the City of Otsego that the Prior Resolution is
hereby amended and restated to read as follows:
ARTICLE ONE
DEFINITIONS, EXHIBITS, LEGAL AUTHORIZATION AND FINDINGS
1-1. Definitions.
The term used herein, unless the context hereof shall
require otherwise shall have the following meanings, and any
other terms defined in the Lease shall have the same meanings
when used herein as assigned to them in the Lease unless the
context or use thereof indicates another or different meaning or
intent.
Act: collectively the Issuer Powers Act and the Lessee
Powers Act as amended from time to time.
Assignment of Leases and Rents: The assignment of leases
and rents made by the AUTHORITY to the Noteholder with respect to
the Project to secure payment of the Note.
Authenticating Agent: the Paying Agent.
AUTHORITY: the Economic Development Authority of the City
of Otsego and any successor public entity.
Bond Counsel: the firm of Briggs and Morgan, Professional
Association, of Saint Paul and Minneapolis, Minnesota, or any
other attorney designated by the AUTHORITY duly admitted to
practice law before the highest court of any state and nationally
recognized in the field of municipal finance, and any opinion of
Bond Counsel shall be a written opinion of such Counsel.
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Business Day: any day other than a Saturday, Sunday, legal
holiday or a day on which banking institutions in the City were
the principal office of the Paying Agent is located are
authorized by law or executive order to close.
Condemnation: requisition or taking by governmental
authority or by a person, firm or corporation acting under
governmental authority and a conveyance made under threat of
Condemnation provided such conveyance is made with the approval
of the AUTHORITY, which approval shall not be unreasonably
withheld, and Condemnation award shall include payment for
property taken or requisitioned or conveyed under threat of
Condemnation.
County Recorder: the County Recorder for Wright County.
Financial Journal: Northwestern Financial Review or any
other newspaper or journal devoted to financial news circulated
in the English language in Minneapolis and St. Paul, Minnesota.
Holder: the person in whose name the Note is registered, as
shown on the Note Register maintained by the Note Registrar.
Independent: any person who is not a full time employee of
the AUTHORITY or the Lessee.
Independent Accountant: a certified public accountant or
firm of certified public accountants registered, Independent and
qualified to practice as such under the laws of Minnesota, and
not regularly employed by the AUTHORITY or the Lessee except to
perform independent audits of the books and records of either or
both of them or to make other similar periodic reviews.
Independent Counsel: an attorney or firm of attorneys
designated by the AUTHORITY, Independent and duly admitted to
practice law before the highest court of any state.
Independent Engineer: an architect or engineer or
architectural or engineering firm designated by the AUTHORITY,
Independent, and registered and qualified to practice such
profession under the laws of Minnesota.
Internal Revenue Code: the Internal Revenue Code of 1986,
as amended.
Issuer Powers Act: Minnesota Statutes, Section 469 through
469.048 and 469.090 to 469.108, as from time to time amended.
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Land: the parcel or parcels or other interests in real
estate described in Exhibit A to the Lease.
Lease: the Lease with Option to Purchase Agreement dated
January 1, 1993, whereby the AUTHORITY proposes to lease, or
sublease as to the Land, the Project to the Lessee, a form of
which Lease is on file in the office of the AUTHORITY.
Lease Payments: rental payments payable to the AUTHORITY
under Section 5.1 of the Lease.
Lessee: the City of Otsego, Minnesota, or any successor to
its functions.
Lessee Powers Act: Minnesota Statutes, Section 469.041 and
465.71, as from time to time amended.
Mortgage: the mortgage in the Project granted by the
Authority to the Noteholder to secure payment of the Note.
Net Proceeds: with respect to any property insurance pay-
ment or Condemnation award, the amount remaining after deduction
of all expenses reasonably incurred by the AUTHORITY in the
collection thereof, including but not limited to attorneys' fees,
witness fees and any extraordinary expenses of the AUTHORITY.
Net Revenues: all sums realized from the operation of all
or any part of the Project by the AUTHORITY after deducting all
necessary reasonable current costs of operation of the Project
incurred by the AUTHORITY determined in accordance with accepted
accounting practice, including, but without limitation,
administrative expenses incurred solely with respect to the
operation of the Project; current maintenance and repairs
necessary to maintain the Project in adequate repair and
operating condition; labor and the cost of material and supplies
necessarily used for such current operation, maintenance and
repairs; insurance of the premises against risks and in amounts
for which insurance is usually carried by prudent owners of like
properties, including but not limited to insurance required by
the Lease; insurance of the AUTHORITY and its officers and
employees against liability for damage to persons and property
incurred in connection with such operation, in amounts such as
are usually carried by prudent operators of similar enterprises,
or in lesser amounts to which AUTHORITY's liability may be
limited by law; and charges for the accumulation of appropriate
reserves for the payment of operating costs which recur
periodically but in varying amounts. The operating costs of the
Project shall also include the cost of any renewal, replacement
or improvement of or additions to capital assets incurred by the
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AUTHORITY to facilitate the lease, sale or other disposition of
the Project after any termination of the Lease. The operating
costs of the Project shall not, however, include any allowance of
payment for depreciation; any portion of the salary or wages paid
to any officer or employee of the AUTHORITY, except such portion
as represents reasonable compensation for the performance of
duties necessary exclusively for the operation of such Project,
and not for other operations of the AUTHORITY; or any liability
incurred by the AUTHORITY or any officer or employee for damage
to persons or property, in excess of the amount of such liability
compensated by insurance. The Net Revenues from the operation of
the Project constitute all of the revenues from time to time
received from the operation of the Project, including any
improvements thereto, in excess of said operating costs incurred
and payable or to become payable within one month and any
reasonable reserve therefor. In addition Net Revenues shall
include all sums realized from the sale of all or any part of the
Project after deducting all necessary reasonable costs of the
sale incurred by the AUTHORITY.
Note: the Public Project Promissory Non -Recourse Note,
Series 1993 (City of Otsego Lease Purchase Project).
Note Closing: the date on which there is delivery of and
payment for the Notes.
Note Fund: the Note Fund created under Section 5-6 hereof.
Note Register: the register maintained by the Note
Registrar pursuant to Section 2-9.
Note Registrar: the Secretary of the AUTHORITY and any duly
appointed successor Note Registrar.
Noteholder: any Holder of a Note.
Outstandi-na: used as any particular time with reference to
the Note, means the Note in the principal amount of $450,000
except (i) principal fully paid or otherwise discharged under
Article Eight hereof; and (ii) the Note in lieu of or in
substitution for which another note shall have been executed and
delivered by the AUTHORITY pursuant to the terms of Section 2-5
of the Resolution pertaining to replacement of the Note.
Paying Agent: the Secretary of the AUTHORITY, or any other
bank designated pursuant to this Resolution as the agent of the
AUTHORITY to receive and disburse the principal and interest on
the Note.
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Project Acquisition Fund: the Project Acquisition Fund
described in Section 5-1.
Purchaser: The Bank of Elk River, in Elk River, Minnesota.
Representative: the President of the AUTHORITY or the Mayor
of the Lessee, or any other person at any time designated to act
on behalf of the AUTHORITY or the Lessee as the case may be, as
evidenced by a written certificate furnished to the other party
containing a specimen signature of such person and signed for the
AUTHORITY by its President or for the Lessee by its Mayor.
Resolution: this resolution of the AUTHORITY. All
references in this Resolution to designated "Articles," "Sec-
tions" and other subdivisions are to the designated Articles,
Sections and subdivisions of this instrument as originally
executed. The words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Resolution as a whole not
to any particular Article, Section or subdivision.
1-2. Exhibits.
The following Exhibits are attached to and by reference
made a part of this Resolution:
(1) Exhibit A: legal description of the Land; and
(2) Exhibit B: description of equipment to be included in
the Project.
1-3. Legal Authorization.
The AUTHORITY is a body corporate and politic organized
and existing under the Issuer Power Act, and is authorized under
said laws to initiate the Project herein referred to, and to
issue and sell bonds for that purpose in the manner and upon the
terms and conditions set forth in the Issuer Power Act, and in
this Resolution.
1-4. Findings.
The AUTHORITY has heretofore determined, and does
hereby determine, as follows:
(1) the AUTHORITY is authorized by the Issuer Powers Act to
acquire the Land for the public purposes expressed in the Issues
Powers Act, provided for installation and construction of the
Project Equipment and Improvements therefor and to lease the
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Project upon the terms set forth thereon and to issue the Note
and execute the Mortgage and the Assignment of Leases and Rents.
(2) the AUTHORITY has made the necessary arrangements with
the Lessee, for the establishment within the City of Otsego,
Minnesota of a Project consisting of property to be used as a
community center, all as more fully described in the Lease and
which will be of the character and accomplish the purposes
provided by the Issuer Powers Act; and the AUTHORITY has by this
Resolution authorized the Project and execution of the Lease,
specifying the terms and conditions of the acquisition,
installation, improvement and construction of the Project and of
the leasing or, as for the Land, subleasing of the same to the
Lessee;
(3) in authorizing the Project the AUTHORITY's purpose is,
and in its judgment the effect thereof will be, to promote the
public welfare by providing publicly owned facilities required
for governmental services needed for: the attraction,
encouragement and development of economically sound industry so
as to prevent, so far as possible, the emergence of blighted and
marginal lands and areas of chronic unemployment; the development
of industry to use the available resources of the community in
order to retain the benefit of the community's existing invest-
ment in educational and public service facilities and to halt the
movement of talented, educated personnel of mature age to other
areas, thus preserving the economic and human resources needed as
a base for providing governmental services and facilities; the
provision of accessible employment opportunities for residents in
the area; and the expansion of an adequate tax base of the City
of Otsego to finance the increase in the amount and cost of
governmental services, including educational services for the
School District of the City;
(4) the amount estimated to be necessary to finance the
Cost of the Project will require the issuance, sale and delivery
of the Note in"the aggregate principal amount of $450,000 as
hereinafter provided;
(5) it is desirable, feasible and consistent with the
objects and purposes of the Issuer Powers Act to issue the Note,
for the purpose of acquiring, constructing, improving and
installing the Project;
(6) the Note and the interest thereon do not constitute an
indebtedness of the AUTHORITY or the City of Otsego within the
meaning of any constitutional or statutory limitation and do not
constitute or give rise to a pecuniary liability or a charge
against the general credit or taxing powers of the AUTHORITY or
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the City and neither the faith and credit nor the taxing powers
of the AUTHORITY or the City is pledged for the payment of the
Note or interest thereon; and
(7) the Purchaser has offered to purchase said Note at a
purchase price of $450,000 in accordance with the terms and
conditions of this Resolution.
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ARTICLE TWO
NOTE
2-1. Authorized Amount and Form of Note.
The Note issued pursuant to this Resolution shall be in
substantially the form set forth herein, with such appropriate
variations, omissions and insertions as are permitted or required
by this Resolution, and in accordance with the further provisions
of this Article, and the total principal amount of the Note that
may be outstanding hereunder is expressly limited to $450,000
unless a duplicate Note is issued pursuant to Section 2-5. Said
Note shall be in substantially the following form:
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RESOLUTION I
CITY OF OTSEGO
RESOLUTION APPROVING
PLANS AND SPECIFICATIONS
AND
ORDERING ADVERTISEMENT FOR BIDS
WHEREAS, pursuant to a resolution passed by the Council on
January 27. , 1992, the Consulting City Engineer, Hakanson
Anderson Assoc a s, Inc., 222 Monroe Street, Anoka, Minnesota
55303, has prepared plans and specifications for the improvements
of Nashua Avenue between CSAH39 and 83rd Street and 85th Street for
approximately 750 lineal feet east of intersection with Nashua
Avenue, Municipal State Aid Projects 217-101-01 and 217-102-01,
City Improvement Project 91-2, and has presented such plans and
specifications to the Council for approval;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
OTSEGO, MINNESOTA;
1. Such plans and specifications, a copy of which is
attached here and made a part hereof, are hereby approved.
2. The City Clerk shall prepare and cause to be inserted in
the official paper and in the Construction Bulletin, an
Advertisement for Bids, upon the making of such improvement under
such approved plans and specifications. The advertisement shall be
published for 21 days, shall specify the work to be done, shall
state that bids will be received by the City Clerk and Engineer
until 10:00 a.m. on Tuesday, March 3, 1992 at which time they will
be publicly opened in the Council Chambers of the City Hall by the
City Clerk and Engineer, will then be tabulated and will be
considered by the Council at 7:30 p.m. on Monday, March 9, 1992 at
the regularly scheduled Council meeting in the Council Chambers,
and that no bids will be considered unless sealed and filed with
the Clerk and accompanied by a cash deposit, cashier's check, bid
bond or certified check payable to the Clerk for five percent of
C Y s?u S?&such bid.
Ma